AZY Resource Valuations (Exploration vs Production), page-9

As with all exploration, mining & mineral processing operations, especially in the Pilbara, there are risks. Potential risks faced by Antipa Minerals Ltd may relate too;

Drilling Programme delays: Extreme summer heat (>45oC) can delay drilling programmes, impact machinery reliability (overheating) and workers suffering dehydration. Potentially drilling during summer nights or conducting a massive drilling campaign prior to summer is the safest option. Seasonal cyclonic weather can contribute to production delays in this part of the world during January-March wet season. Flooding of roads and bush tracks can severely halt the movement of machinery and personnel until things dry out. Bush fires in the warmer months (from lightning strikes) can occur but limited vegetation exists in this semi-arid region.

Ore Mineralogy: Complex ores from Calibre, Corker, Minyari, Grey, Serrana, Pobland and Arbol deposits which have lead, zinc, tungsten and cobalt may be technically challenging to recover from a metallurgical perspective so there true value may not be realised. A focus on the recovery of the main base and precious metals (Gold, Copper and Silver) could be the primary driving factor for the design of a robust metallurgical flowsheet. Unidentified contaminates in the ore (clays, bismuth, arsenic, or fibrous materials) could complicate mineral processing methods so innovative mineral processing flowsheets are utilised to resolve any potential throughput, recovery or safety concerns. Metallurgical laboratories in Perth are well setup to conduct diverse test work which is used in the plant design phase for optimising metal recoveries.

Water: The supply of suitable quality and abundant quantities of water could be a risk if insufficient ground water is found. A desalination plant and water pipelines would be an option from Telfer or the coast?

The exploration program has conducted varying levels of resource assessment so far. From aerial magnetics for finding significant targets, ground based geophysics, RC and diamond drilling activities to retrieval and electronic logging of physical core. Rio Tinto appears to have streamlined this process to enable modelling and economic assessment of their Winu orebody & the Citadel Project in an accelerated timeframe. The risk is they are moving too fast to allow government & native title permits, environmental studies and licences to be approved in the required timeframe. With the drive to kick start the domestic economy, I would not envisage many delays from State or Federal governments.

Impact of Covid-19 in WA has not slowed exploration work significantly. Adjustment to employee rosters combined with standard Covid-19 social distancing and enhanced work hygiene measures are standard workplace requirements in the mining industry. The ability to utilise interstate workers is the major limitation but this is overcome with utilising local labour.

The integration of Rio, Newcrest and IGO into the exploration program is another smart measure that will ensure a steady flow of valuable exploration data is maintained and reported to the stockmarket. An old saying “If you cannot measure it then you cannot manage it”. One thing is for certain, the tenements are being measured at a massive rate, thanks to the exploration budgets, which drives more effective and informed decision making by respective parties.

The biggest challenge for the success of the business could be from legal disputes between each company over such things as land access, mine safety, royalties, water rights, etc.